During President Trump’s first week back in the White House, Elon Musk’s Department of Government Efficiency identified an early focus of the cost-cutting operation: canceling leases for federal buildings that were considered underused.
Mr. Musk’s team has since claimed credit for terminating leases for hundreds of properties across the country, including some that house federal workers at the Internal Revenue Service, the Food and Drug Administration, the Energy Department and the National Park Service.
So far, Mr. Musk’s group has said that the effort will save around $500 million. But the Trump administration’s attempt to cancel leases and offload vast amounts of federal property has hit major stumbling blocks in recent weeks, with lawmakers and some agency officials saying those efforts could undermine vital government services and conflict with the administration’s requirement that federal workers return to the office.
Now officials at the General Services Administration, an agency that manages the federal government’s real estate portfolio, say they are reversing more than 100 lease terminations. That includes an Energy Department office in New Mexico that manages a nuclear waste repository, and an office used by U.S. Army Corps of Engineers workers who respond to hurricanes in Florida.
The turnabout comes after the agency this month released a list of more than 440 federal properties that could be sold off, including several headquarters for cabinet-level departments, before removing the entire inventory the next day with little explanation. The chaotic effort to downsize the government’s real estate portfolio is another example of the setbacks the Trump administration has faced as officials race to carry out the president’s policy agenda.
Administration officials say they will save taxpayers money through sales and lease terminations of “underutilized” federal office space and “functionally obsolete” buildings. Since the start of Mr. Trump’s second term, the G.S.A. has sent out 827 lease termination notices and 117 letters rescinding some of them, Stephanie Joseph, a spokeswoman for the agency, said in a statement last week. Officials declined to provide a full list of the canceled leases.
Ms. Joseph said the agency was still “exploring” the cancellation of more than 1,000 leases that agencies no longer identify as critical, a move that she said would “result in significant savings of taxpayer dollars.” She added that the rescission of some termination letters was “based on the feedback from customer agencies,” and that officials requested more information from agencies last month before sending out termination notices. The G.S.A. said in a statement that it would also work with agencies to secure alternative spaces for public-facing facilities.
The agency’s figures differ slightly from those published by Mr. Musk’s team, which identified 793 lease terminations for facilities used across the country. The White House did not respond to requests for comment.
Some lawmakers, including Republicans, have expressed concern about the effort to shutter federal offices in their districts. Representative Tom Cole, Republican of Oklahoma, said that several local offices would remain open after he worked with Mr. Musk’s team and the administration.
“I am thrilled to announce that common sense has prevailed, as the National Weather Center in Norman, the Social Security Administration Office in Lawton, and the Indian Health Services Office in Oklahoma City will remain operational in Oklahoma,” Mr. Cole said in a social media post this month.
The three offices, however, still appear to be included in a list of cancellations on the Department of Government Efficiency’s website.
Mr. Musk’s team has also claimed credit for terminating the lease of an Energy Department office in Carlsbad, N.M. The potential cancellation of that lease raised alarms among lawmakers because the office is responsible for managing the Waste Isolation Pilot Plant, the country’s only permanent underground repository for nuclear weapons waste.
Senator Ben Ray Luján, Democrat of New Mexico, said that the office was critical for national security and environmental safety and that the attempt to close it was “reckless.”
“It serves as yet another example of how Elon Musk and President Trump are undermining the federal government and our national security with total disregard for the consequences,” Mr. Luján said in a statement. “While the G.S.A. has confirmed that the lease will not be terminated, I will continue to stand strong to protect the federal workers that this administration continues to target.”
An Energy Department spokesperson said the G.S.A. had revoked its prior notice to terminate multiple department facility leases, ensuring that “these mission-critical operations continue without disruption.”
Other federal agencies said they had some lease cancellations reversed and were seeking to undo more. Agency officials cited the importance of their employees’ work and the need for office space after the Trump administration announced an end to remote work for most federal employees.
A U.S. Army Corps of Engineers lease in Jacksonville, Fla., was slated to be terminated by Aug. 31 before the building’s management received a letter rescinding the termination, according to a spokeswoman for the Jacksonville district. That date would have fallen in the middle of the hurricane season, typically a busy time for the district. The branch’s workers conduct emergency response missions for the entire state in coordination with the Federal Emergency Management Agency, said the spokeswoman, Michelle Roberts.
Mr. Musk’s team also identified a lease termination for a U.S. Army Corps of Engineers office in Chicago. Jacob Zdrojewski, a spokesman for the agency’s Chicago district, said the agency was seeking to reverse the cancellation, along with another termination in Griffith, Ind.
“We are actively working with G.S.A. to reverse the terminations at both locations,” Mr. Zdrojewski said. “With the return-to-work requirements of this new administration, we require seats for all the district employees, so if the terminations cannot be reversed, G.S.A. is required to find new locations that could accommodate all existing employees.”
Mr. Zdrojewski said the cancellation of the leases could have far-reaching effects. Employees could be required to work out of other locations, potentially leading to the loss of experienced personnel if workers could not be relocated, he said. The loss of space could also hinder the agency’s emergency response capacity, he added.
Other facilities that appear to be listed on the DOGE website are, in fact, not slated to be closed. A lease for a roughly 50,000-square-foot facility used by the Food and Drug Administration in St. Louis is still listed on the website. But an F.D.A. spokesperson said last week that its St. Louis laboratory would remain open.
The Trump administration is still moving ahead with many other lease terminations. Zaya Younan, the chief executive of Younan Properties, said his firm received a termination notice around three weeks ago for roughly 100,000 square feet of space used by the I.R.S. in one of the company’s buildings in Phoenix.
Mr. Younan said the decision was puzzling because the space appeared to be pretty occupied by workers. If the I.R.S. lost the space, he added, taxpayer services could be affected.
Mr. Younan said he had tried to contact the G.S.A. multiple times but had not received a letter rescinding the cancellation.
The Trump administration’s attempt to offload federal properties and save taxpayer dollars is not a novel idea. The Biden administration also sought to decrease the federal government’s real estate portfolio. The federal government has long struggled to identify and remove unneeded property, and maintenance and repair backlogs have reached $370 billion, according to a recent Government Accountability Office report.
David Marroni, a director in the physical infrastructure team at the Government Accountability Office, said that there were opportunities for the federal government to reduce its real estate portfolio, but that it was important for officials to have a plan to generate the most savings.
He noted that there were many changes the Trump administration had ordered that would affect the amount of space the government needs, including the push to shrink its work force and the requirement for federal workers to return to the office.
“All of these moving parts point to the need for some deliberate planning,” Mr. Marroni said.